Banking with Interest An Idiot's Guide to Basel III Endgame
13 snips
Mar 25, 2026 John Heltman, Washington Bureau Chief of American Banker and veteran Fed and banking regulation reporter, guides listeners through the new Basel III Endgame proposal. He walks through how the latest plan reshapes capital rules, operational risk, G‑SIB surcharges, and which banks are affected. They discuss timing, political reactions, and whether this marks a turning point in Basel implementation.
AI Snips
Chapters
Transcript
Episode notes
Three Interacting Dials Determine Final Capital Impact
- The three proposals act like separate dials: Basel changes the calculation, G‑SIB adjusts size coefficients, and the standardized approach alters risk weights for loans like mortgages.
- Together they offset and interact, so some elements raise capital while others lower it.
Submit Specific Bank Level Comments Not Just Trade Letters
- Expect a prolonged comment and revision process and prepare detailed, bank-specific feedback rather than relying solely on trade associations.
- Regulators previewed parts publicly, so focus comments on contentious items like op risk and G‑SIB indexing.
Op Risk Must Be Quantified Even If Arbitrary
- Operational risk is inherently hard to quantify and regulators tether it to a bank's business indicator component multiplied by a factor to yield a capital requirement.
- That approach is arbitrary by nature and likely to draw criticism but was necessary to create a measurable requirement.